The Sticky Statute of Limitations in NC

If you are not a lawyer, but you play one on TV, you may have a passing understanding of the legal concept of a statute of limitations. This is post is to provide you just a little more information about the concept, and how it applies to your North Carolina construction project.

What is a statute of limitations, and why is it important?

The Statute of Limitations is a time-barring statute which gives you a set time within which to bring an action (i.e., lawsuit) against another party. If you do not bring your lawsuit within that period of time, the court will kick it to the curb. The reasoning behind the statute of limitation (often, ironically, abbreviated as “SOL” in legal circles) is that people need to have some certainty in how long they can be sued for an event that happened in the past. Witnesses die or forget, papers are destroyed, and in general it is extremely difficult to try a case years after the fact. The law has, therefore, established a somewhat arbitrary deadline for when you can sue or be sued, and it is vital that you do not go past that deadline if you hope to bring a lawsuit.

What is the statute of limitations on a construction project?

The answer, as always, is: it depends. The statue of limitations is governed by whatever state’s law will apply to your case—usually, but not always, the state the project was built in. The statute of limitations is also determined by what type of lawsuit you are trying to bring (or defend against).

In North Carolina, the statute of limitations for most construction disputes (breach of contract, professional negligence, implied warranty of plans) is generally 3 years from the date time when you knew or should have known about the issue. N.C. Gen. Stat §1-52.1 ABL Plumbing and Heating Corp. v. Bladen Co Board of Education, N.C. App. 623 S.E.2d 57 (2005). See also AIA A201 para. 13.7. As always, there are exceptions. If a contract is “under seal”, a claim can be brought for up to 10 years. (N.C. Gen. Stat. §1-47).

If the contract involves merchandise and falls under the Uniform Commercial Code, the statute of limitations is 4 years. N.C. Gen. Stat §25-2-725. However, where a defect in merchandise results in bodily injury or damage to real property, the shorter 3 year statute still applies. Hanover Ins Co. v. Amana Refrigeration, Inc., 106 N.C. App. 79, 415 S.E.2d 99 (1992). In Hanover, a defective HVAC unit caused a fire, which destroyed a building. The court held that the shorter 3 year statute of limitations applied because the defective merchandise caused damage to the real property.

Therefore, it is best practice to assume that the Courts will find that the statute starts running at the first inkling of a problem, and bring your action accordingly. Also, regardless of the length of any warranty period, contractors can still be liable until the statute of limitations period expires.

What happens to claims after the owner accepts the project?

Once a project has been accepted by an owner, the owner waives his right to claim damages for all but latent defects. Acceptance by the owner with knowledge of a defective performance may be deemed a waiver of the defective performance.

Where, however, the defect is unknown (or “latent”), the owner’s acceptance does not waive the defective performance. Tisdale v. Elliott, 13 N.C. App. 598, 186 S.E.2d 685 (1972). If a defect is a “latent” defect, hidden or not readily discoverable, the statute of limitations starts running from the date of discovery. Under AIA A201 para 13.7, any statute of limitations is deemed to have accrued in any and all events not later than the date of Substantial Completion. This section may shorten the statute of limitations in some cases of latent defects.

Can the Statute of Limitations be lengthened or shortened?

Yes. But, as they say on television, “don’t try this at home.” Carefully drafted agreements for a shorter or longer period of time can be executed. Consult your attorney before you do so, however. You may also want to check with your insurance carrier to make sure you have sufficient insurance coverage for a longer warranty period.

What if the parties are working together to fix construction problems?

If the parties are working to fix problems, but the statute of limitations is fast approaching– run, don’t walk, to your attorney to discuss a tolling agreement to stop the running of the statute, or otherwise enter into legally enforceable agreements concerning the statute of limitations. Just because the parties are all working together to solve a construction issue now doesn’t mean that the finger-pointing won’t begin once the bill is presented.

Hi Melissa.
I have an issue where part of my HVAC ducting was not done to code by the builder. The house was build 11 years ago and did have a 2-10 warranty but this is not a warranty issue because nothing broke but the work was not completed according to code. The HVAC line that runs under my kitchen cabinets was never attached to the toe-kick register so hot/cold air is being dumped under my cabinets. I only discovered this a month ago when I realized that the cabinet bottom which is just above the HVAC line was delaminating and sagging a couple inches. I assume that because this is (1) a code violation for the HVAC not being completed properly and (2) a latent issue that the builder would be responsible for fixing the issue. Is this correct?
Thanks,
Greg

Greg: It does sound like a latent defect. However, the statute of repose for work in NC is 6 years. After that, even if you didn’t discover the defect until year 11, you cannot obtain relief from the builder. See more here:

Greg: It does sound like a latent defect. However, the statute of repose for work in NC is 6 years. After that, even if you didn’t discover the defect until year 11, you cannot obtain relief from the builder.

I am curious if the HOA for a condo development of mostly freestanding homes (started 2006 finished circa 2010) has any legal rights with regard to water issues in multiple homes in crawl spaces and impacting foundations and showing up under driveways and patios at present? Problems discovered were being treated as one-off issues (59 total homes), but now appear to be part of a larger pattern of issues resulting from poor or improper grading of land, bad materials, and less than proper procedure by builder. Many are being discovered when significant issues literally bubble up or during inspections for sales.

The rights of a condo HOA for free-standing homes would depend in large part on where the actual damages are, and, therefore, who has the standing to sue. But if the homes finished in 2010, you are well past the 6 year statute of repose, so unfortunately would be out of luck in any event.

Question for you: I hired a contractor (not licensed GC) to over see a re-model (kitchen, baths, tile work, porch built, skim coating, some walls taken down/built, painting inside and out). Really, almost everyone did a very poor job for me and chose inferior products. The work ended 10/31/17 when I finally kicked them all out of my house! Now, the house needs to be repainted because they didn’t use primer; walls/seams need to be mudded again though I paid to have that done. Cheap lumber on the porch is starting to curl already. I don’t have a contract in writing.

What recourse do I have? Can I LEGALLY REQUIRE the painter to come back and repaint and re-mud? Can I require the contractor who built the porch to put down better boards?

Hi Pierrette, and thanks for your comment. If you have not yet paid all sums due under the contract, you could use those funds to pay for repairs. (I’d document the current condition with pictures and video before any destructive work is done). But, if you do not owe any more money, or the repairs will cost more than what you owe, you’d need to file a lawsuit to prove your damages, which then would enable you to recover money for the repairs. It’s not an easy process, and sometimes you end up with a judgment on paper but the contractor has no money to collect from. Another option is to make a claim with the insurance carrier for the contractor, if he has insurance. They will sometimes cover the work, if it damages “other property” (that is, other parts of your house).

I’m not the first owner of a home built in 2006. I just had an incident after owning the home since 12/2010 which uncovered my home was not built to code (no weather wrap beneath the siding), in effect causing the wood beneath to rot. Can the builder still be held liable for the damages and correction of work since my insurance is chalking this up to damage over time?

This problem was not noted on my inspection and we were completely shocked to find out the way we did today.

Jerry:
For something that happened more than 6 years previously, you cannot collect from the builder. This is not the statute of limitations, but rather the statute of repose that has come into play. Unfortunately this is one of those times where the law does not seem to serve the purpose of justice.

Melissa hello my name is jon. I am in NC and just bought a brand new home. We have issues with drywall where we can see the seams and it’s bad and other items. I’ve been trying to get the builder to fix them and it’s been bad. They aren’t doing it, delaying it and telling us they don’t work on weekends making me and the wife miss days of work to come see if there is even a issue. We have a ton if emails showing we have them and photos. My question is can I sue and how long do I have to give notice for the statue. Then can you get lost time and work etc plus the repairs. They aren’t cooperating and constantly telling us this is normal and that we want things fixed that are normal which they are not. This isn’t my first house but man this is my first bad experience that you hear about. What is the NC statue for this and or how do I tell them it’s fix it or court without sounding threatening.

Jon:
Sorry to hear about your issues. If you just bought the house, you have time. You have 3 years from when they last worked on the house (not including punch list and warranty work) which is generally around the date of the certificate of occupancy. If you just bought the house, and assuming that it did not sit for years, you should be good. You also would have a claim of breach of contract/implied warranty for 3 years from when you bought the house as well.

There is no set notice in NC that is required before you file suit, and you can certainly sue for substandard work that is not in accordance with industry norms. Drywall splitting can be expected to a limited extend, but even so they should be willing to fix it especially in a brand new house. You can recover costs to fix your house issues, plus interest at the legal rate (8% per year) from the breach of contract date, and court costs (filing fees etc). You cannot recover emotional stress, your lost time, or your attorney fees. So it does become a balancing act to decide if it is worth suing. Depending on the amount, you can also sue in small claims court, which is less costly and quicker. As far as how to tell them fix it or court– well, that is a subjective thing. You can be good cop, and if that doesn’t work, hire a lawyer to be bad cop to them. Or you can be bad cop.

I landed here because I am researching warranty issues and ready to seek legal advice. We are within our warranty period. Due to a poor installation of a shower door enclosure, a water leakage resulted in mold under the flooring. The builder removed the flooring and supposedly had the mold killed and subfloor cleaned but it has bothered us that the shower pan was never removed. Because of all the delays, we decided to hire someone to do some further investigation and are in the midst of working with them. The initial test found high moisture still exists along the base of the shower pan. It seems it is going to be a battle with the builder. (The neglect was on their vendor’s part in the poor installation.) My concern is over the wording of the warranty, and whether or not they’ve set a precedence by doing the work to begin with. The warranty states that it does not cover “Loss or damage resulting form, or made worse by: any defect consisting of, caused by, contributed to, or aggravated by moisture, wet or dry rot, mold, mildew, fungus, or rust, regardless of the originating cause of any moisture or water penetration that leads to the defect.” We prefer to deal with the builder and not turn it into a legal issue, but decided it is best to at least seek counsel to determine where would we potentially stand on the issue.

Lisa: Whether or not the warranty applies, all builders have a duty of good workmanship, which is sounds like your builder did not follow. I agree that often dealing with the builder can be more efficient than going through litigation. You can hire a lawyer (whether or me or someone else) to discuss options to negotiate an acceptable settlement/repair with the builder. If you want to talk further, give me a call or send me an email.

We have a new construction home that upon our 1 year inspection, the inspector noted that the builder cut floor joists in the crawl space. This could technically weaken the floor and would need an engineer to sign off on the work. I asked the builder for his engineer’s letter supporting the case that the structure is good and he told me to kick rocks… If this was noted within our 1 year wouldn’t he be required to provide one? If so do I have a case to take him to court?

David:
It depends on whether or not an engineer would say that the cuts in the floor joists effect the stability of the house. It may be worth it to hire an engineer on your own dime to do a short inspection and give you an opinion. If the engineer believes that there may be safety issues, you’d use that to sue the builder for breach of warranty. Alternatively, if you notice structural issues within the 3 years after you took occupancy, you could sue at that point, letter or not!

In July 2013 we had a lot of rainfall. There was a retainer wall next to back wall of my home (retainer wall was not on my property) and the weight of the earth got extremely heavy from rain and the retainer wall tipped into my house. When it did this, the retainer wall busted thru the 2X4s and window of my house. The wall of my house was literally shoved in. Nationwide who holds my homeowners policy said it was mudslide and flood. There was NO MUD and NO WATER damage whatsoever. NATIONWIDE REFUSED THE CLAIM SAID IT WAS MUDSLIDE AND FLOOD. The roof began to collapse because of the damage to wall from retainer wall that fell into it. Finally I received a couple thousand $ from state emergency funds and from wonderful volunteer workers (NC Baptist Men and Knights of Columbus) who literally rebuilt the whole room. I just can’t shake the irresponsibility of Nationwide. I have all pics and documentation. The owner of the property that the retainer wall was on….the insurance co said since no one was injured, they weren’t responsible. Is there anything that I can do at this point? I always thought that Nationwide should have my claim and sought reimbursement from the property owner insurance co whose property the retainer wall was on. Repairs were made but is there any action I can take against my insurance company Nationwide at this time or did I just wait too late?

Hi Holly! am sorry for your loss. I can’t speak directly to the policy that you had, as they are all slightly different and I can’t look at how/why they denied the claim. The short of it in this instance is that yes, you are too late to pursue anything now. For any readers facing similar situation, you need to make a claim within 3 years– it would be a “bad faith” claim against your insurance company, OR a third party claim against your neighbor’s policy. I

Thanks so much for taking questions here. We just had a beautiful cement floor tile installed…however the work was done incorrectly and the tiles are all laid uneven, giving a cobblestone effect (think stubbing toes, can’t slide barstools, vacuum gets stuck, etc.). How do we handle getting the work corrected as we paid big money to have this done right the first time? The tile layer says he did a good job and isn’t owning up to the problem???

Ultimately, if the tile contractor won’t own up to the problem, you will need to take him to court. Depending on the amount, small claims court is a good option. If it is a larger amount, district court is better, but that can be more expensive and take a lot longer. If you have any insurance information on him, you could make a claim with his insurance company; however, “bad work” itself is usually not insurable. If the tile work damaged other property in the house, then they may accept the claim.

I did some construction work for who I thought was a friend. 1). I did extra work that we discussed verbally but she now is refusing to pay me. She is paying the guys that worked with me but not me fully. Is she liable for payment or am I Sol because it’s not in writing?
2). Also she assumed work would be done that was not in writing and we discussed we would not do at this time. Now she wants to with hold my final payment (separate from the extras done) claiming the job is not complete and I passed all final inspections. Do I have grounds to a small claim?
Thanks D

You certainly have legal rights. 1) It does not matter that you did extra work under a verbal agreement– she is still liable, and you can verbally agree to modify a written contract, which is what happened here based on what you’ve told me. 2) If she thought other work would be done, she needs to show either where it was in the written contract, OR that you agreed to do so in a subsequent verbal contract. But sounds like she’s trying to argue both ways– that she is entitled to verbal changes, but you are not. That is not how it works. Verbal contracts are tough in that it can be hard to prove your side in court, but they are binding. As far as the extra work you did, she should not be “unjustly enriched” by not paying you for that work. Absolutely you can take her to small claims court (if under 10,000) or district court.

Hi Melissa,
I purchased a new construction home in 07/2010. Ever since the beginning I’ve had electrical issues when major storms go through. I’ve had “my” electrician out a few times to solve the problem and he normally replaced a few breakers and outlets and walked away baffled. I’ve replaced most of the major appliances, plus several TV’s, computers, music systems, game systems, and a bunch of small stuff like home phones and alarm clocks. Not to mention all the service fees I’ve paid for including the AC guy and “my” electrician. I finally had an experienced electrician review my home, and in late 08/2016 he discovered that my house was never grounded. The grounding wire was sitting in the dirt, not attached to the rod, without a clamp in sight. Not only was it never grounded, but even if it had been grounded it wouldn’t have been grounded to code (two grounding rods, six feet apart). Is this a latent defect? Could I possibly take action even though it was discovered about 55 days past the six year mark?

Melissa, we purchased a NC home in 2006 (built in 2002). This past April we removed the back porch (block, filed with dirt, poured concrete floor) because it was cracking and falling off the house. We uncovered that the house foundation (just the back wall) was approximately 6″ to 7″ shorter than the frame. To fix this, looks like they removed a couple rows of block and cantilevered 7 rows of brick stepping them out over the block foundation until they met the frame. Then covered it all up under the porch. My contractor said it was the “shoddiest” work he has ever seen. Since we just discovered this does the 6 year statute still apply?

Joe:
For some reason this comment was in my spam filter, so apologies for the delay. Unfortunately, since the house was built so long ago, I don’t believe you could survive summary judgment on a statute of repose issue. Even though you only discovered the issue (that is, it was a latent defect), the statue of repose is pretty much an absolute, absent evidence of intentional fraud. You could still contact the builder and tell them your discovery, and ask them to resolve the issue, but as far as legal leverage you don’t have much to go on here. Sorry!

We flipped and sold a house in july of 2010. Have a general contractor license and homeowners got and passed a home inspection prior to getting their loan from the bank. Currently being sued from homeowners for various repairs like a leak under the sink and an unlevel floor that needs concrete piers underneath. Do they have any recourse? Statute of limitations? Also this is the first I have heard of it. Never received a phone call to try and fix or inspect any of the alleged defects.

If the house sold in 2010, and this is the first they are claiming damages, yes, they are too late. Even under the latent discovery rule, it still needs to be within the statute of repose, which is 6 years in North Carolina. You should be able to get out from the lawsuit if you properly claim the statute of repose as a complete and total defense to the claim.

We purchased a home that was built in 1999. During remodel we have found that the original manufacturer of the home was in violation of several NEC codes. Can we go back on the manufacturer to have them fix the violations?

Cheri:
Unfortunately, since it has been more than 6 years since the house was built, you cannot make a claim against the original manufacturer. You may be able to bring a claim against whoever you purchased the property from, if it was in the last 3 years.

We purchased a historic home in late 2013 with an additional FHA 203(k) construction loan attached. Our GC required 50% upfront for materials. After multiple attempts at discussing the project in a civil manner, with the assistance of the lender (being under the 203(k) guidelines for contractor assignment) we dismissed our original GC, but in doing so we were unable to negotiate the reimbursement of any of the upfront monies allocated to him, as he stating we surrendered the money due to a breach of contract. Are we still within the statute of limitations for pursuing this legally? And if so, do we have any legal entitlement to these monies?

Yes– breach of contract is 3 years, so you still have a little time since it was “late” 2013. But your timeline is coming up so be aware of that. You *can* get money back even if you had to cancel the contract, depending on contract language and particulars of your case.

I am buying a new construction home and ready to close in few days. Home inspection reported Mold presents throughout crawl space. Builder agrees to remediate and do a onetime cleaning before closing and after that no warranty. My question is if the mold growth happens again still I will be covered by statute of limitation for three years or not ,since warranty say it does not!! Builder is in an argument its normal!!

Ben:
I bought a house October 2014, by the mid to the late of June, I noticed a leak in the sealing. I reached out to the home warranty insurance, after the second visit they concluded that the shingles were not properly installed. I tried to resolve this matter for more than 8 months with the roofing company.

I forgot to mention that the roof was place due to the hail damage by the Statewide roofing in 2011. What can I do? help please.

Ben:
Was this a new house, or did you buy it from a homeowner? You mention that the roof was replaced in 2011. Is this the work that was done poorly? Depending on *when* in 2011 it was done, you are coming up on a statute of limitations/repose problem. You only have 6 years from the bad work to bring a hidden claim (3 for a noticeable claim). So check to see when in 2011 the work was done. If you bought the house from another homeowner, they likely also have some liability to you unless they sold the property “as is”. Ultimately, you may need to sue the roofing company and/or the prior homeowner to get someone to pay for the damage.

I have lived in my slab built home for seven years. Many of my neighbors are finding that cracks in their slab are getting bigger. The builder had told us at closing that anything less than1/2 an inch is fine and does not need to be repaired. Now the cracks are at least 1/2 inch. He is now telling us that the warranty is expired. Do we have any recourse?

If it has been more than 6 years, you are really out of luck due to the statute of repose. There is a tiny exception to this if you can document actionable fraud on the builder’s part, you *might* get around that, but that’s an extreme case and very unlikely. Sorry for your problems!

We are at the tail end of our new house that was just built being complete. The builders have been great, except that we have found at least 4 leaks. The one I found, the plumbing pipe nut was not even finger tightened. Now this plumber comes out and fixes the issue, but I feel that these issues are from negligence and am worried about the plumbing we can’t see. Do we just wait and see if there is leaks/mold/and rot in the future and then start attempting to fix it and get reimbursed. Or is there a way we can demand that another plumber investigates this guys work and potential document it if the original plumber did an incompetent job? So we are the owners. We have the builders/contractors. And they hired a plumber. It is their responsibility as we just moved in and they are still fine tuning the house. But I just want to know it is truly fixed and there is a lot of plumbing hidden between the basement ceiling and the 1st floor. Any advice is appreciated.

Matt:
You probably have to wait to see if you have issues. You could request that they send someone else to investigate, but if they don’t, you’d have to pay for it yourself. That may be worth the peace of mind to you. Just keep the 3 year statute of limitations in mind, and make sure you are happy before they expire.

I’m not the expert on code issues by any means, but as long as the permit was still open I’d think they could easily come back. After the permit is closed? If they see something when they are there to inspect something else, perhaps? Hope that helps!

The issue of Statute of Limitations does not have to relate to a permit. Small projects may not require a permit, but they still have time frames after which a lawsuit cannot be filed. And, even if someone (illegally) does work without a permit, if the work was done over 3 years prior, you don’t have a legal claim. There may be licensing board issues, and criminal charges potentially, but not civil liability once the statute of limitations has passed. Thanks for your comment.

Hi,
I finished a home for a client who had fired his previous contractor. We received the CO in December 2013. The owner wanted the cabinet contractor and a few other contractors do some additional work that prevented me from being able to complete what I was contracted to finish for around 7 months.
Recently he had signs of a leak on his rear covered porch. The prior builder completed the brick above the porch without proper flashing and the owner wanted me to continue with the porch completion and only install apron flashing which he was advised that it would potentially fail.
My question is while I am willing to fix the problem, am I liable for it?
Thank you.

The short answer is: you could be, and litigation is costly. You are within the 3 year statute of limitations, so you could be sued if you didn’t fix it. In that case, I’d fix it and be done with it unless the costs would be prohibitive. Good luck!

Bought a new home in 2014 (North Carolina). A new home warranty has been implied and the builder (based in South Carolina) has done some warranty work but appears to be ignoring other issues, including land erosion and other latent defects. I cannot find any document in the sales contract that states the terms of a new home warranty and no one seems to know exactly what is and isn’t covered (including the attorney who handled the closing). Is there a way to find out this information?

If they didn’t spell out an express warranty in a written document, then it sounds like they are simply under the standard implied warranties for new homes. This is a broad warranty provision that basically states they need to meet the standard of care of similar builders in a similar community. Land erosion and latent defects should be included in that. Hope that helps.

Is your issue simply the time delay in getting the bill? Because on a contract claim, you are liable until 3 years have passed, so the electrical contractor is well within his rights to bill you now. (Not that it makes sense, from a business standpoint, to wait to long, but it is allowable so long as he isn’t trying to get interest or fees out of you for his delay). If the issue is that you’ve already paid in full for the work, but your contractor did not pay the subcontractor, then you do have some defenses. Let me know if you have more questions.

I purchased new construction built by KB home in Morrisville approx. 2.5 years ago, we have had significant drainage issues around the back of the home ever since, despite the builder installing 3 french drains. I found out recently that several other homes in our neighborhood have requried retaining walls and french drains, some of which the homeowners have had to pay for. I contacte the builder (again) recently to request extending and joining the french drains to hopefully solve the problem, and the builder stated that it was a persistent problem b/c of the erosion plan and the fault of the land developer and the town of Cary, which the town of Cary denies.
The builder also stated that, after closing, they are not requried to address any issues that are not warranty issues. This does not seem correct, and the town of cary has suggested that the subdivision file a complaint with the AG’s office, since the types of issues the subdivision has had “are between a builder and a homeowner are private/contractual matters that the town does not have authority to intervene in.” Thoughts? seems like the SOL would not apply here if there was defective land development?

I cannot comment on specific cases or specific builders/developers. In general, though, you have 3 years from the Certificate of Occupancy to bring a claim. Not sure that the AG office will do much, as it really is a civil dispute with the builder, but can’t hurt to see what they say. The SOL applies, regardless of defects, as the law needs to have finality at some point. You can sometimes extend a 3 year SOL up to the Statute of Repose (6 years in NC) if the defect is hidden, but it will still be time barred at some point.

We bought a new construction home in 2005 and have recently listed it for sale. We have had 2 buyers so far notice cracks in our stucco and were concerned so I called a foundation company to make sure it was just minor settling cracks. He has told me its s a bigger issue than I thought and steel rods need to be installed to sure up the home. Can my builder be responsible for this or is it too late under NC law?

It is more than the statute of repose, so undoubtedly it is too late. However, you should check with your homeowner’s insurance to see if they might cover it. Also, if the builder gave you a 10 year warranty for structural issues, then you can still make a claim if you file before the 10 years runs out.

I am and electrical contractor last year I did a job with another electrical contractor who actually was a sub himself and he then sub my company to help him with a project. He failed several times to meet the agreement of payment and then by the end of job he took me out of the picture completely and payed my men directly. Haven’t heard anything from him for about 4 months now all the sudden he is telling me i owe him money or he will sue me. He had my men doing extras for 4 months without paying us so I refuse to go back to job for any issues. He basically took over job but then wants me to be responsible for the problems. I signed a lien waiver for him to get paid on job and the aggreement was I walk away from job. What should I do?

Jeff:
It sounds like this person breached his contract with you. As such, if he sues you, you could counter-sue him for the damages you have incurred as a result of his breach of contract. I’d wait to see if he does sue you and evaluate at that point. Lots of folks talk but don’t follow through on such things.

My wife and I bought a house a little over 2 years ago. The warranty expired in September however we discovered that the faucet was leaking below the kitchen sink and all of the wood below is completely rotted. The leak has obviously been going on for quite some time, is the builder still responsible or are we out of luck?

You may have a claim– in general, there is a 3 year statute of limitations so sounds like you are okay there. I’d ask the builder to fix it, but if he doesn’t see if he has insurance you can report the claim to. You may need to sue to force the repair, so before I went that route I’d also check with your homeowners’ policy.

I signed pool contract last July 2013, but pool financing was disapproved. I received verbal assurance contract was voided and my deposit check was never cashed and presumed destroyed. I canx payment on it anyway to be safe. I recently revisited the pool idea and had the old contract (previous signed contract), revise initial pool estimate. I informed them that I was seeking other estimates and that I would make a decision based on the best proposal. I selected another company and when I notified the other proprosal vendors, they are insisting that I am still under contract with them from the previous year. I have already signed contracts and made deposit with the new vendor and find myself in the middle and do not know what options, if any, I have….HELP!!!

Interesting. The contract that you signed last year probably had some self-limiting language in it where it became void after a certain period of time. Even if it didn’t, the fact that so much time has elapsed shows that the parties intended that the contract be cancelled. Sounds like the company is trying to force you to go with them, but you likely have defenses to their claims. If they try to sue you, give me a ring and we can discuss.

We purchased a home in 2010. A few weeks ago a landscape designer noticed our 150 retaining wall is failing. We learned the previous owner had the wall built by a non-professional post closing with the builder in approx. 2002. We have been quoted 150K to replace the wall. It is so poorly constructed, not engineer certified in cannot be repaired. How bad is this is for us?

The statute of limitations for the person that did the work has expired. However, you bought a property with certain warranties from the previous owners. You might have a claim against them for breach of certain implied warranties made in the deed. You bought the house over 3 years ago, but arguably it was a latent defect so you may be able to get around that statute. If you want to talk about a possible claim against the former owners let me know.

I purchased a home in 11/2009 from the builder. In the last 2 weeks we have found the siding on the home was installed incorrectly. The manufacture of the siding has voided our warranty for improper installation and my homeowners insurance has denied the claim for the same. Builder is still in business, Can I file a claim against him if he is “insured/bonded” or is my only course of action to sue? Any help is greatly appreciated…

You may be able to do sue the builder, so long as the claim is brought before the 6 year statute of repose has passed. The regular statute of limitations has run, but you may have a case for a latent defect (depending on how observable the defect was). Even though the builder is insured/bonded, you are likely going to have to sue. You can *attempt* to have the builder’s insurance company respond and pay for the defect without litigation, but often it is necessary to bring a lawsuit to get them to the table. Hope that helps. Let me know if you want to talk.

I have a question regarding a cut sewer line.
In 1985 AT&T installed a phone main line behind our house and cut our sewer line. We could not see the damage, as it was underground, and did not KNOW about it till a few weeks ago. I called them the day we discovered the damage. They now are denying the claim basing it on expired statute of limitations. There is a provision allowing for action after said expiration.
The Discovery Rule
Sometimes it is not reasonably possible for a person to discover the cause of an injury, or even to know that an injury has occurred, until considerably after the act which causes the injury. For example, an error in the drafting of a will might not be noticed until the will is being executed, decades after it was drafted, or a financial planner’s embezzlement might not be noticed for years due to the issuance of false statements of account.
Would this apply to our situation and what would be our course of action?
Thank you for any suggestion in advance!

Kenny:
Sorry to hear about your sewer line. There is a “discovery” rule, also known as a “latent defect”.

However, that is still subject to a 6 year outside limit, called the statute of repose. So, it sounds like you are out of luck as to AT&T. Depending on when you bought the house, you could have a claim against the seller (if it was within the last 6 years). You also should report this to your homeowner insurance company as it may be covered under that.

We built a custom home in 2007 and closed on the home Dec. 6, 2007. To keep this short and to the point, it has taken 6 years for a stain to show up on the ceiling of our breakfast nook which has been determined to be caused from a defective membrane/bladder under the shower floor (it must have a hole in it). Do you believe that the statute of limitations in NC will protect us?

You need to act *fast*. Yes, it sounds like you may be okay under the 6 year statute of repose, since the discovery wasn’t until recently. However, based on the above, it looks like Dec 5th of this year will be 6 years, after which you will not be able to file a lawsuit for it. PLEASE see someone ASAP.

who is responsible for repairs: I bought a house from a friend who purchased and completed construction of a foreclosed home, windows, lights flooring.The driveway was completed by the original developer, who placed an under-sized drain pipe in a surface water drainage ditch which appeared to be 1-2 ft. wide when I bought the property. Storm water washed away the soil he had hauled in and landscaped around the pipe, to reveal a 6ft .wide creek and created a 12 ft. deep sinkhole,30×40 ft. wide around the driveway. estimated repairs are over $10,000. neither are willing to replace the pipe and the insurance company said I am not covered for flood damage.

That depends. Sorry to be so vague, but: did the deed say “as is” when you purchased from your friend? How long ago was the driveway built by the developer (i.e., has the 6 statute of repose run?). If the statute of repose has not run against the developer, and he was negligent, you have a breach of the warranty of habitability (which yes, can apply to later owners) and possibly other claims. Re your friend- it depends on the deed. I’d also not give up on the insurance issue yet– how are they defining it as a flood? Call me if you want to talk further.

My husband and I purchase a new home with a closing date of June 1 2010. We found mold under the house in the crawl space the end of August early September 2010, the builder did a complete remediation and cleaned up all the mold. I noticed last summer June 2012 that the crawl space was again wet. After the company built a new house next door and installed the sprinkler system the sprinkler water was reaching all the way to our house and spraying water directly into our crawl space. I had 3 representatives from the company come out look under the house with me and all three assured me it was fine. I asked my husband to go under the house last month and check for mold and indeed mold was growing again. The builder removed all the infested insulation but now my hardwoods are all buckled because it is so moist under the house. My main question is …..does the 3 year time limit start now for statue of limitations or start from the original occurrence of mold. Thanks.

You have a good argument that the statute starts from the 2012 incident. It sounds like that was a completely new cause of crawl space moisture, yes? Now if I were on the other side I’d try to claim statute of limitations as a defense, but I think you have a good chance of surviving such a defense if the facts are as you present them.

my house was built in 2002. i am the second owner and bought the house in 2011. after getting the house i have found many things that weren’t found by the home inspector. i am in construction so i know what is done right and wrong for the most part. i have found many things like my property not being graded right so water is always sitting at my foundation from my neighbor house that sits 6′ away and has their gutters and ac drains pointed directly at my house. just recently my driveway has started pushing up because of the erosion and water getting underneath, the rock that was put on the front of the house for “siding” did not get tar papered like it should so my windows are leaking and water seeps through the wall to the inside. the rest of the house is vinyl siding. i am assuming it was never inspected or was only checked in certain areas as others were covered due to the fact that under that as sheeting the used a 1/8″ think sheet of paper is what i would call it. its not hard like wood but flimsy and is more like cardboard. and in many places as i was cleaning and repairing siding that was damaged there are gaps where they didn’t over lap as code would require during those years so i can see into my wall. and the areas they overlapped were not to code as well or sealed for that matter, this is the same material they used under the rock siding causing the problems. i have windows that were not secured properly and if you lean on them they will fall out, and on top of that were never sealed so there is a draft and they leak. this is just a few things. to make a long story short i am figuring the statue has run out, but is there any kind of legal recourse i have to sue the contractor or county for approving such blatant code violations, or the use of inferior building material, etc? if not, also what kind of recourse do i have if talking to my neighbor about the water run off can i have if he is unwilling to help which im sure he wont. its my understanding that its not okay for this to happen. thanks for the help.

Yes, the statute of repose has run on the builder (assuming you are in NC). Re your neighbor’s water, however, you might have a cause of action there in that he is interrupting the “natural” flow/drain of the water. He should definitely re-direct the water away from your house, and you may have a case for damages to your property from his water discharge. It’s a tough case to sue any governmental entity for code/inspection issues due to governmental immunity issues.

As the result of straightline winds during a summer storm in 2011, we had aprox. 93 tons of oak tree fall through our home; nearly ripping it in half lengthwise. We hired a general contractor to perform the $90,000+ in repairs (the GC was a “preferred vendor” with our home owners ins.). Nearly a year later in 2012, the repairs were complete and we moved back into our home. Since that time, we have begun to notice a variety of quality and workmanship issues throughout the home, including shoddy plumbing and electrical work (the kitchen sink plumbing literally fell off underneath, the main sewage line from the house backed up into our bathtubs, electical circuits “buzz” occasionally, etc), inferior paint quality on the interior (not to mention the wrong colors and sheens), the re-use of damaged materials, and most recently, an HVAC system that does not cool. The HVAC system was replaced entirely and the new system is of a much-lower quality than the original system…and they didn’t install the under-cabinet ducting to vent the air. The HVAC installer refuses to even come out and look at the unit and from what I’ve read, the warranty is null.

The contractual agreement between the GC, myself, and the insurance company stated that the repairs would be made to pre-damage standards or better. Our home was of much higher quality components and construction prior to the damage and prior to the GC’s work. He hid his lack of skill well, though. As I said, we are just now starting to experience the effects of his shoddy workmanship and finding more and more issues as time moves on.

Because the home was supposed to be repaired to a condition that is “as good or better” than pre-damage; do we have a legal right to hold the general contractor accountable for his improper repairs and replacement components?

Thank you in advance; your previous comments have been helpful as well.

Hi Patrick. Yes, if the “better than” language was in the GC’s contract, then he is required to live up to that standard. But even without that language, what you are describing sounds like poor workmanship. GCs have an obligation to meet a reasonable standard of care, consistent with industry standard. It is not a perfection standard, but if it is as poor as you describe, he’s probably violated that and can be sued on those grounds as well.

My house was built in 2006 , used as a model until 2008 and I am the second owner. I purchased in 2012. I did not have a home inspection. When I replaced the carpet and moved a shower, a crack in the slab the entire width of the house was discovered. There is ( and was) also a crack across the front porch that was obvious when I purchased the house. Do I have any recourse on the builder? I believe the company is out of business, but do contractor’s in NC carry completed operations insurance?

I believe you likely have a statute of limitations and statute of repose problem. Even going from the 2008 date, you are more than 3 years out. Unless you can prove fraud (i.e., they covered up the crack on purpose), you are probably not going to be able to recover. It is possible that a contractor had completed operations insurance, but you likely are time-barred there as well. Couldn’t hurt to look into it, but that’s my initial reaction.

Hi Taylor! Not per statute. Per statute (if the contract is silent), there is only the 3 year statute, plus the 6 year statute of repose. But, some builders offer a 10 year structural warranty, and they are free to do so. But if the contract is silent on the issue, you only get 3 years. Thanks for brining structural warranties to the discussion.

I purchased a home in may 2011. We have several issues with the home. The home has wood floors which are starting to warp, cup, and crack. I have never seen wood floors do this and our home builder is stating this is normal. I have had a few companies come out to look at the issue and they are stating that this appears to be an issue due to a very damp crawl space where moisture is being pulled up from the crawl space. Wood floor contractors have indicated that my only solutions are to seal the crawl space and replace the wood floors. These items will cost us near $30 thousand. Should I contact our home owners insurance company at this point? Another issue is that the floor is settling in multiple locations and separating from the base boards the gaps appear to be significant. I can see in multiple spots where the home builder had injected caulk due to this settling and now it is getting much worse in other spots throughout the home.

Ted:
Thanks for your inquiry. It sounds like you may have a construction labor or construction materials issue, but certain cracking can be normal. It depends really on the nature, number, and severity. It’s certainly worth asking your homeowners insurance agent about whether or not such is covered. If it is, that is the simplest method to pursue. Otherwise, you’ll need to sue the builder within the appropriate statute of limitations and repose. Let me know if we can help.

My fiancee and I purchased a home (at the top of a hill) in 2008. We brought in our own inspectors who found a list of problems which needed to be corrected. One of the corrections was to dig about 4 inches of dirt from the back corner of the foundation. Apparently there has to be a certin amount of the foundation showing. When we did that they noticed some cracks in the foundation which they said were not a big deal. We ended up taking the company we purchased the home from to court and won about $30,000 because we found out soon after moving in the plumbing was draining right under the home, not to the sewer/water lines, there was very limited wiring and what was there was extreemly out of date.We won the lawsuit and figured the problems were over. Exactly 5 years to the date of moving in the house (from another state) the foundation in the front corner caved in. The insurance company says they wont repair it cause it’s caused by roots. (Keeping in mind there were cracks found in the back corner where there are no trees/roots, my fiancee is an arborist) We called in a structural engineer and a geiogolist who believe the house has been in danger for a LONG time and someone should have caught this before allowing the sale. They dug 8 holes around my home and found it was not even on a proper foundation. It’s sitting on an upside down triangle of concrete. They took 12 bags full of samples and we should find out soon if we were correct that the home is basically falling down the hill. From what I hear the statue of limitations is 3 years in NC but this was known to have a issue (the cracks they found) but we were told it was safe. Do we still have a case?

You *may* still have a case, depending on whether the court decides that the structural issues were latent defects. If so, then the statute does not start to run until the date of discovery/date you should have discovered the issues. The fact that there was cracking could be determinative, but it’s not clear cut either way so certainly worth looking at in depth.

I built a home 2.5 years ago and did not use a builder. I researched the steps, interviewed contractors and did it myself. I recently had a leak on the second floor which caused some sheet rock damage on the first floor. The leak was a faulty toilet. Does the plumber have any responsibility to us for these damages. Thanks

If the plumber installed a leaky toilet, then he is negligent. If it was under 3 years ago, then you don’t appear to have a statute of limitations issue. Be sure, however, to start litigation before the 3 years is up. (There might be some latent defect arguments available if you did so, but better safe than sorry). Let me know if I can help.

Being sued for breach of contract case for personal guaranty agreement with bank, borrower defaults, bank forecloses and sues for deficiency after forclosure – SOL runs from last payment on orignial note (more than three years ago) or date of foreclosure (just under three years ago),can you give me statute

I knew there was some problems with trim not being finished but a very serious out of state family emergency kept me from going after the contractor at the time.

It is now almost four years since the work was performed but I learned in the past three months that I have water and structural damage that I did not know about prior.

I want to sue but have been told by two attorneys that I missed the 3 year statute of limitations. Others advise that the statute is three years from when the problem is discovered and the NC Licensing Board of General Contractors state that the statute is 6 years.

Thanks for your comment. On the trim issue, the statute of limitations (3 years) would apply, so you can’t recover there. However, with regard to the water/structural damage, the 3 year statute of limitations would not *start* to run until such time as you reasonably knew/should have known of the problem. I’m assuming, for this situation, that these are “latent” or hidden defects that were not obvious prior to 3 months ago. If that assumption is correct, then the statute doesn’t start until the problem becomes apparent.

The statute of repose ( 6 years) is different than the statute of limitations. It is a harder line to get past, but it sounds like you don’t have that issue if the work was done 4 years ago.

Therefore, while the contractor will likely assert statute of limitations as a defense, it is still likely that you can get a recovery for the water/structural issues if they were indeed latent defects.

We as new shareholders in a company based in NC in Feb 2009 only to discover that the previous President of the comapny was invovled in stealing of customer checks and depositing into a phoney bank account which he opened with a bank in NC . The stealing commenced in July 2003 but the mattter came to light in Feb 2009 when we took over the operations of the company

Obviously the bank is liable for wronfully conversion of checks .In its defence the bank is claiming Statutory of limitation as a defence . As mentioned we only came to know of the theft in Feb 2009 . We would not have known about the fruad prior to Feb 2009

Kishore: I am sorry to hear of your troubles. As a general rule, however, if the fraud was concealed, then the statute should not start running until after its discovery. I cannot answer more than that based on the facts you’ve given me. If you would like to make an appointment to discuss the matter further, give me a call at 919-881-2214.

In part, it depends on what the Builder’s Warranty language says, specifically. However, in general you have three years (in NC) from substantial completion to bring a breach of contract claim. It is definitely worth fighting over.

I did a loan closing on my first homn in February 2010. I purchased a manufactured modular home where over 80% was done with the manufacturer and about 20% done on site. The home had a one-year builers warranty that expire roughly February/March 2011. Due to the loss of my fiance, I did not begin occupancy until April 11, 2011. In April 2011 I started experincing shingles sliding on the roof. I thought it was due to high winds. This caused some water leakage on the ceiling. I have experienced this twice with no high winds. I noticed a pattern where the shingles were sliding along the front-side of the home. I had never been able to get in the attic due to no stairs. I borrowed a ladder and began to research the water leaks and missing shingles. I discovered a gap between the plywood and this was the source of my leaking problem. The leaks wasnt massive, but steady. The gap was not visible or noticeably discoverable. A small piece of boarding was placed to try to conceal the gap. Am I stuck with handling this problem since the one-year warranty expired or do I have a general case possibly with the manufacturer?

I purchased a new construction home in 2008. Had issues with water pooling around the foundation of the house. Builder was notified and installed a french drain. Problems did not go away. Several months later found a massive leak under concrete slab foundation. Builder came out and fixed leak but was negligent to the damages done to hardwood floors due to water leaking through concrete. Only when the insurance company got involved did he agree to repair floors. Had floors repaired and three weeks later had water damage reappear through the hard wood floors. Had thermal camera take images and found a signicant amount of water coming through floors. I am exhausted with this problem and really could use some advice on how to proceed. Any advice would be greatly appreciated.

We own a swimming pool company.We built a pool for a customer about 2.5 years ago.Since then the customer had a crack that appeared in the deck about a year after we did the job.We went back out and fixed it , the same crack reappeared a year later.I told the customer that the warranty was up that that crack was due to ground settlement which our contract limited warranty stated.I feel the crack came from large concrete columns that the customer installed after we built the pool.We have now been served a letter by these customers lawyers claiming that what we did was neglient.Do you think we can successfully fight this?

Thanks for your comment. Obviously, it is hard to state with any certainty the liklihood of success without knowing all of the details. (And even then, anything that goes to a jury is a wild card!). While your warranty may have expired, you may be looking at a negligligence claim, which would still fall within the 3 year SOL. However, if the customers’ work on the site caused the damage, and you can prove that (usually through expert investigation), then you should have a good defense to a claim. Give me a call (919-881-2214) if you want to discuss further. Good luck.

Can you tell me about the statute of limitations in NC for a home inspection company? We bought our home (built in 1897) in 2003. The inspection company was extremely thorough with one major exception. Our entire upstairs floor was not stable. We didn’t notice the problem until 2 years ago when we had a baby and tried to put his nursery upstairs. Before then we lived downstairs on a day to day basis – the only exception being holidays when we would bring down decorations. The upstairs only contained spare bedrooms. We paid nearly $7000 last year to replace the flooring (sub floor and all). Thanks for your help!

Thanks for your comment. I’m sorry to hear of your situation– sounds like the inspector really missed a big item! The statute of limitations would be the same- 3 years from when you knew or should have known about the problem. Unfortunately, the statute of repose may be an issue for you, in that the work was done more than 6 years ago. You may still have a claim against the inspector depending on whether a court would view (1) his work as relating to the property enough to be subject to the repose statute and (2) when you reasonably should have learned of the defect. You may also have claims against whoever sold you the home. If you’d like to talk further, give me a call. [As always, I can only offer general information based on many assumptions here on the blog, and cannot give legal advice here]

Have you heard of a NC construction statute concerning a situation where a client has an idea that probably won’t work, so the contractor makes them sign a waiver and informs them that it may not work but if it fails the contractor is liable anyway. Possibly on the basis that the contractor should not have taken the job because in his professional knowledge he know the chances of success were to low.

Benton:
Thanks for your comment. Not sure of a specific statute on this, although contractors, designers, and others who are licensed have a duty to perform in accordance with how others in their industry/area would perform. (See https://constructionlawnc.com/2010/06/24/standard-of-care/ for example). If the client wants something that violates the standard of care and/or law/Code/regulations, than the professional should inform the client. The standard can, by agreement, be changed, but law/Code/regs cannot and the professional has a duty to abide by them. If it is not a Code issue, then arguably if the client is well informed that the job will likely *not* work, then the professional likely has a valid defense. However, I would never advise the construction professional to rely on such a waiver because it is always subject to challenge.

I enjoyed your reading your analogy of the basic statute of limitations.
At best the statute of limitations can be a sticky subject in most jurisdictions.
As a Construction Defect Litigation Specialist for Commercial Insurance Policies I have noticed a trend over the last few years in that the Judges will often remand such statute of limitation arguments back to a jury as a question of fact as to whether or not a statue has tolled. The arguments to prevail on a summary judgement motion from the court have to include clear and convincing evidence as to when a party knew or should have known of the problems in which prompted the claim to begin whith.
Can you give your opinion on the North Carolina Statute of Repose as it concerns New Construction, Renovations and Improvements to Real Property as to the discovery of latent defects?

Wayne:
Thanks for reading and commenting! Yes, most judges in North Carolina are very conservative with the granting of summary judgment on SOL issues or others. I tell clients- it can be done, but it is often an uphill battle.

Next Thursday I will have a dedicated post to the Statute of Repose, but for a sneak peak: essentially, and in general, 6 years regardless of latentness of the defect.

I Installed Plumbing In A House In Summer 2006 For All The Water And Drain Pipes In A New Construction Home.WE Set All The Toilets,sinks,and faucet in winter 2007.Homeowner had a leak with a water pipe fitting that was installed and tested in summer of 2006 and passed all local plumbing inspections.Looks Like A Factory Defect With All The Corosion On The Fitting.Where do i stand on this.

Heath:
Thanks for your question. If your work was done more than 6 years ago, which it sounds like it was (depending on how you define “winter 2007”), then you should be covered by the Statute of Repose if the work was done in North Carolina. After 6 years, any claim should barred by that statute. (It varies by state). There can be exceptions to this, depending on your particular facts.